The Delhi High Court has dismissed a petition challenging the Securities and Exchange Board of India's (SEBI) no-objection certificate (NOC) for the National Stock Exchange's (NSE) proposed initial public offering, removing a key legal hurdle for the exchange's long-pending listing plans.
Justice Jasmeet Singh rejected the public interest litigation filed by former judicial officer KC Aggarwal, observing that the plea appeared to be aimed at obstructing the IPO process. The court also noted that both SEBI and NSE are based in Mumbai, where the regulatory clearance was granted, reinforcing the validity of the approval.
SEBI Nod Revives NSE's Listing Process
On January 30, SEBI allowed NSE to restart preparations for its IPO, enabling it to appoint merchant bankers and legal advisers and begin drafting the required offer documents. The regulator's clearance marked a significant breakthrough for NSE, whose IPO has faced repeated delays over governance and regulatory concerns.
With the High Court declining to intervene, NSE can now continue with its listing preparations without immediate legal impediments.
Allegations On Derivatives Adjustment Framework
The petition had alleged that NSE violated SEBI's corporate action adjustment norms, which are designed to ensure fairness and value neutrality in derivatives contracts during events such as bonus issues, stock splits, and special dividends.
According to the plea, NSE adjusted only prices and not contract quantities in certain derivatives trades, potentially disadvantaging market participants. It also raised concerns over dividend-related deductions and the handling of investor complaints.
However, the court dismissed the plea, effectively allowing SEBI's approval to stand and the IPO process to move forward.
NSE IPO Plans Regain Momentum
NSE first filed its IPO application in 2016, but the process was put on hold due to regulatory scrutiny, including governance lapses and the co-location controversy. Since then, the exchange has taken steps to strengthen compliance and address regulatory concerns.
The combination of SEBI's approval and the High Court's ruling is seen as a major step forward for NSE's listing ambitions. With legal uncertainty easing, India's largest stock exchange is now closer to a public market debut that has been nearly a decade in the making.
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